NC developer who took $1.5 million in ‘real-estate Ponzi scheme’ gets 10-year sentence

A Raleigh developer will spend 10 years in federal prison for a fraud scheme that took more than $1.5 million from investors, leaving what prosecutors called a “trail of devastation.”

U.S. District Court Judge James C. Dever sentenced Joshua Matthew Houchins after his guilty plea on counts of wire fraud and possession of firearm by a felon. That charge stemmed from Houchins threatening his wife while his business world collapsed.

Houchins, 38, was convicted of luring investors to build or renovate homes in and around Raleigh, telling them their money would be “put to work” on the properties, according to his 2020 indictment.

But rather than use that money on specific property, court records said, Houchins shifted it to other real estate projects or used it for himself. Investments were not secured by a deed of trust, the indictment said, and in many cases, Houchins did not even own the property.

Life savings lost

Sentencing Houchins, Dever called his victims “real people who spend their lives doing the right thing, like not buying the fancy car, not going on vacation ... hoping to find reasonable investments with reasonable returns ... not expecting someone to look them in the eye and lie to them.”

His victims, one tearfully, stood in court Monday and described losing life savings and retirement accounts, then having to hunt down Houchins for returns that never came.

Assistant U.S. Attorney William Gilmore said Houchins’s “real estate Ponzi scheme” lost investors their jobs and triggered depression. In one case, he said, Houchins took $900,000 from a single person.

Houchins would move to different spots around the state and change his business identity through shell companies, Gilmore said. He destroyed his computer when facing a subpoena in 2018.

“He blatantly lied to these people,” Gilmore said. “He sold them things he didn’t even own.”

In addition, Gilmore showed the court pictures Houchins sent his wife after his “life fell apart,” showing him dressed in a tactical vest and mask with gun magazines strapped to his chest.

He had searched the Internet for the phrase “killing your wife over love,” Gilmore said — enough that his wife feared him and sought a protective order.

‘We ran ashore’

Houchins, whose addresses ranged from Boone to Sanford, stood in his orange Lee County Jail uniform and apologized to his victims. He said he felt remorse and never intended to hurt anyone, a statement both his victims and the prosecutor doubted.

“The business was a dream of mine, and I had failed,” Houchins said. “I acted out of character, completely embarrassing myself and my family. ... I was the one sailing the ship, and we ran ashore.”

Dever said he will recommend Houchins serve his time in Butner, N.C., and that he receive vocational education. He will not be able to take out new lines of credit upon his release without the approval of probation officers.

“When he gets out,” Dever said, “he can hopefully work in an honest way.”